Ukraine in Crisis

Analysis by Former Diplomats and Leading Experts

Wednesday, July 29, 2009, 6:00 am ET - 07:30 am ET

Vice President Joe Biden’s recent trip to Ukraine put it “back on the map,” said former Assistant Secretary of State David Kramer at a panel event hosted Wednesday by the Center for American Progress on the future of Ukraine’s foreign policy and domestic politics.

The three-member panel discussed Ukraine’s upcoming elections, the Ukrainian economy, U.S.-Ukraine relations under the Obama administration, and the impact of the “reset” of U.S.-Russia relations on Ukraine. Former U.S. Ambassador to Ukraine Steven Pifer and James Sherr, the head of the Russia and Eurasia program at the Royal Institute of International Affairs in London, joined Kramer on the panel. The Center’s Senior Vice President for National Security and International Policy, Rudy deLeon, gave introductory remarks, and Dr. Samuel Charap, the Center’s Associate Director for Russia and Eurasia, moderated the panel.

The relations between Russia and Ukraine were central to the panelists’ discussion. Sherr explained that Prime Minister Vladmir Putin “does not trust a single Ukrainian” and insists on viewing Ukraine as “Malaya Rossiya,” or “Little Russia” despite the country gaining its independence after the dissolution of the Soviet Union in 1991. Sherr said that this view has made it difficult to construct a productive relationship between the two countries.

Ukraine has made “real progress since 1991” despite strained relations with its eastern neighbor, Kramer said. He noted that its political processes have been “peaceful and constitutional” and that there is now a distinct separation of powers among the three branches of government, making it a “fragile democracy.”

That fragile democracy was put to the test, however, by the recent financial crisis. Kramer argued, “You can’t talk about the politics of Ukraine without talking about the economic situation.” Ukraine’s gross domestic product dropped by an estimated 18 percent year on year in the first half of 2009, and Sherr said this has put a strain on the Ukrainian social contract, which he described as “the government screws up, but stays out of our lives.”

Ukraine’s economic woes are further complicated by its current foreign policy concerns. Pifer explained that some Ukrainians have “very palpable concerns that efforts to ‘reset’ relations with Russia would come at the expense of Ukraine.” He said this perception is not well grounded, and that Biden’s July visit helped dispel it.

Biden’s trip was only the beginning of what promises to be an ongoing dialogue between the United States and Ukraine. The Obama administration “needs to get a good dose of patience, and buckle up, because it is going to be a bumpy ride,” according to Kramer. Pifer suggested that the United States should continue to support the International Monetary Fund’s lending program to spur economic recovery, but the administration should also insist that Ukraine continue to meet the IMF’s conditions.

All of the panelists agreed that internal reform is also necessary for Ukraine to prosper, and Pifer identified three specific areas where change is needed: the constitution, the economy, and the energy sector.

Energy sector reform might be the most pressing issue the country faces. With presidential elections approaching next January and a gas payments crisis looming, “The election cycle and the energy cycle in Ukraine are coming to a head at the same time,” said Sherr. He explained that the terms of Ukraine’s hastily negotiated energy deal with Russia earlier this year have set the stage for yet another showdown between the two countries.

Moving forward on U.S.-Ukraine relations will require a multifaceted approach that brings economic improvement and political reform, according the panelists. There was no clear agreement on what exactly must be done, but Sherr said he was most concerned by “the consequences of neglect” if the administration falls victim to “Ukraine fatigue.”

Rudy deLeon, Senior VP for National Security and International Policy, CAP

Featured panelists:

The Honorable David Kramer, former Assistant Secretary of State The Honorable Steven Pifer, former Ambassador to UkraineJames Sherr, Head, Russia and Eurasia Program, Chatham House (Royal Institute of International Affairs), London

Moderated by:

Dr. Samuel Charap, Associate Director for Russia and Eurasia, National Security and International Policy Program, CAP